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Wealth for Knowledge

By Paromita Pain
May/June 2018

GyanDhan provides prospective students cost-free services and solutions to help fund their education through loans.

Planning to pursue higher education? The opportunity could be exciting, but also quite expensive. One option for prospective students is to avail education loans. The process, however, is not easy. From finding a bank that understands students’ interests and deems them viable enough to invest in to completing the documentation, the entire loan process can be a complicated and daunting task.

Here’s where GyanDhan enters the picture. It is an education-focused financing platform which has positioned itself as a provider of comprehensive solutions.

The online portal was launched in April 2016 by Ankit Mehra and Jainesh Sinha, alumni of Indian Institute of Technology (IIT) Kanpur and Delhi, respectively. Over Rs. 160 crores has already been sanctioned as education loans.

GyanDhan is not about advising students on studying abroad, though it does have certain services related to reviewing statements of purpose to help students. As Sinha says, “There are others in the market who do this. Our core competency is loans.”

Based on its role in supporting students to pursue higher education, GyanDhan was shortlisted for the final round of the Global Innovation through Science and Technology (GIST) Catalyst pitch competition at the 2017 Global Entrepreneurship Summit (GES), held in Hyderabad. “It was very exciting to be a part of the 2017 Global Entrepreneurship Summit,” says Sinha. “This was a fantastic opportunity for networking and sharing of ideas.”

Data-based strategy
Mehra and Sinha have over five years of experience shaping credit strategies for Capital One, one of the largest banks in the United States. Sinha, an alumnus of the Super 30 educational program for underprivileged meritorious students in Bihar, saw how a lack of resources could be a huge hurdle in pursuing educational dreams. He was determined to ensure that even students without collateral could access bank loans. “I earned enough to have a stable base,” he says. “My parents were worried about my decision to leave a well-paying job and start GyanDhan, but I managed to convince them.” Sinha was not hesitant about being a first-time entrepreneur. “If this did not work out, I would have just lost my pay for a few years,” he says. “In the larger scheme, it did not matter.”

At Capital One, Sinha understood the power of data. Capital One could provide credit cards to those from the lower socioeconomic strata because it was able to use data to gauge their ability to pay and check if they had been defaulters. “We saw how smart people from the IITs and other institutions were being rejected because, essentially, the education loan system in the country [India] is broken,” says Sinha. “In India, loans are given mainly against property, serving as collateral security.”

Democratizing loans
GyanDhan has developed a model to predict the future incomes of students. “We work with banks to restructure their education loan policies and products, so that they are guided by the students’ ability to pay and less by the parents’ earnings or ability to provide collateral,” says Sinha. “In the process, we make the bank loan system more democratic.”

It’s never easy convincing banks. But their continued connections with seniors from Capital One and the Indian Institutes of Technology help. Also, their data-based model quantitatively shows the borrowers’ history and educational background, ensuring that loans get repaid. The high employability of students is also emphasized. “We show banks where data could have predicted their past defaulters,” says Sinha.

Students register on the website and get an instant quote on their loan eligibility. Then, a loan counselor from the GyanDhan team contacts them and guides them through the next steps that partner lenders require. The organization works with Axis Bank and State Bank of India. In five cities, GyanDhan loan counselors take the documents from students and act as liaisons with the banks. Students give them their documents and then it’s their job to ensure the loans go through. GyanDhan’s revenue comes from the banks and, thus, the entire service is free for students. “Banks value us because we are a business generator for them,” says Sinha. GyanDhan also has dedicated conflict resolution cells.

Reaching out
GyanDhan conducts a lot of outreach programs across India, talking about its work and the issues students face in pursuing international higher education.

Besides, the GyanDhan website has tools like the “Admission Predictor” which help students make choices about institutions based on their grade point averages and interests. This is, again, based on its database of over 100,000 students. It also has a scholarship base that is updated regularly.

GyanDhan’s future plans include expanding to the United States and setting up an entity to help students from both countries.

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